DOE delays decision on Cheniere’s LNG facility

The U.S. Department of Energy said it needs more time to consider an environmental group’s objections to a Texas company’s plans to build an export terminal for liquefied natural gas in southwest Louisiana.

Earlier this year, regulators approved a permit allowing Cheniere Energy Inc., of Houston, to build the Sabine Pass LNG terminal in Cameron Parish. The $5.6 billion project was the first large-scale natural gas export facility to be approved in the U.S.

In September, the Sierra Club objected and asked DOE to block the project. The group said a more in-depth environmental analysis should be done to examine whether building the facility would result in an increase in natural gas production and environmental damage.

On Oct. 5, DOE issued its decision to take more time to consider the Sierra Club’s request for a rehearing and a stay. The department did not indicate when it would respond to the Sierra Club’s request.

Under its permit, Cheniere could export LNG to countries without free-trade agreements with the United States. The facility, which would chill natural gas into a liquid that can be shipped on tankers, would allow U.S. producers to export natural gas overseas for potentially huge profits. The company hopes to put partial operations at the terminal online between 2015 and 2016.

The Sierra Club argues that federal regulators need to look at the ramifications of increased natural gas production, should the facility be built. The group argues that natural gas drilling creates air pollution, contaminates groundwater and damages the environment in other ways.

Cheniere Energy did not immediately return a message Wednesday seeking comment.